I.

DEFINITION

Organizing as a management function

The word ‘organize’ means placement of ideas, objects or people in a correct order so that they are
easily available whenever required.

In management, it represents all those activities that result in the formal assignment of tasks, authority
&responsibility to groups and individuals.

According to Chester Barnard, “Organizing is a function by which the concern is able to define the role
positions, the jobs related and the co-ordination between authority and responsibility”. Hence, a
manager always has to organize in order to get results.

Reasons for organizing

Organizing is undertaken to facilitate the implementation of plans. In effective organizing, steps are
underrated to break up to the total job into more manageable man-size jobs. Doing these will make it
possible to assign particular tasks to particular persons. In turn, these will help facilitate the assignment
of authority, responsibility, and accountability for certain functions and tasks. Efforts expended in
organizing may also result to easier coordination among the various activities.

A manager performs organizing function with the help of following steps:-

1. Identification of activities - All the activities which have to be performed in a concern have to be
identified first. For example, preparation of accounts, making sales, record keeping, quality control,
inventory control, etc. All these activities have to be grouped and classified into units.

2. Departmentally organizing the activities - In this step, the manager tries to combine and group similar
and related activities into units or departments. This organization of dividing the whole concern into
independent units and departments is called departmentation.

3. Classifying the authority - Once the departments are made, the manager likes to classify the powers
and its extent to the managers. This activity of giving a rank in order to the managerial positions is called
hierarchy. The top management is into formulation of policies, the middle level management into
departmental supervision and lower level management into supervision of foremen. The clarification of
authority help in bringing efficiency in the running of a concern. This helps in achieving efficiency in the
running of a concern. This helps in avoiding wastage of time, money, effort, in avoidance of duplication
or overlapping of efforts and this helps in bringing smoothness in a concern’s working.

4. Co-ordination between authority and responsibility - Relationships are established among various
groups to enable smooth interaction toward the achievment of the organizational goal. Each individual
is made aware of his authority and he/she knows whom they have to take orders from and to whom
they are accountable and to whom they have to report. A clear organizational structure is drawn and all
the employees are made aware of it.
II. Importance of Organizing Function

1. Specialization - Organizational structure is a network of relationships in which the work is divided into
units and departments. This division of work is helping in bringing specialization in various activities of
concern.

2. Well defined jobs - Organizational structure helps in putting right men on right job which can be done
by selecting people for various departments according to their qualifications, skill and experience. This is
helping in defining the jobs properly which clarifies the role of every person.

3. Clarifies authority - Organizational structure helps in clarifying the role positions to every manager
(status quo). This can be done by clarifying the powers to every manager and the way he has to exercise
those powers should be clarified so that misuse of powers do not take place. Well defined jobs and
responsibilities attached helps in bringing efficiency into managers working. This helps in increasing
productivity.

4. Co-ordination - Organization is a means of creating co-ordination among different departments of the

enterprise. It creates clear cut relationships among positions and ensure mutual co-operation among
individuals. Harmony of work is brought by higher level managers exercising their authority over
interconnected activities of lower level manager.

Authority responsibility relationships can be fruitful only when there is a formal relationship between
the two. For smooth running of an organization, the co-ordination between authority- responsibility is
very important. There should be co-ordination between different relationships. Clarity should be made
for having an ultimate responsibility attached to every authority. There is a saying, “Authority without
responsibility leads to ineffective behaviour and responsibility without authority makes person
ineffective.” Therefore, co-ordination of authority- responsibility is very important.

5. Effective administration - The organization structure is helpful in defining the jobs positions. The roles
to be performed by different managers are clarified. Specialization is achieved through division of work.
This all leads to efficient and effective administration.

6. Growth and diversification - A company’s growth is totally dependant on how efficiently and smoothly
a concern works. Efficiency can be brought about by clarifying the role positions to the managers, co-
ordination between authority and responsibility and concentrating on specialization. In addition to this,
a company can diversify if its potential grow. This is possible only when the organization structure is
well- defined. This is possible through a set of formal structure.

7. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every
manager is clear. Co-ordination is possible. Therefore, clarity of powers helps automatically in increasing
mental satisfaction and thereby a sense of security in a concern. This is very important for job-
satisfaction.

8. Scope for new changes - Where the roles and activities to be performed are clear and every person
gets independence in his working, this provides enough space to a manager to develop his talents and
flourish his knowledge. A manager gets ready for taking independent decisions which can be a road or
path to adoption of new techniques of production. This scope for bringing new changes into the running
of an enterprise is possible only through a set of organizational structure.

III. Principles of Organizing

The organizing process can be done efficiently if the managers have certain guidelines so that they can
take decisions and can act.

To organize in an effective manner, the following principles of organization can be used by a manager.

1. Principle of Specialization / Work Specialization

According to the principle, the whole work of a concern should be divided amongst the subordinates on
the basis of qualifications, abilities and skills. It is through division of work specialization can be achieved
which results in effective organization.

2. Principle of Functional Definition / Departmentation

According to this principle, all the functions in a concern should be completely and clearly defined to the
managers and subordinates. This can be done by clearly defining the duties, responsibilities, authority
and relationships of people towards each other. Clarifications in authority-responsibility relationships
helps in achieving co-ordination and thereby organization can take place effectively. For example, the
primary functions of production, marketing and finance and the authority responsibility relationships in
these departments shouldbe clearly defined to every person attached to that department. Clarification
in the authority-responsibility relationship helps in efficient organization.

3. Principles of Span of Control/Supervision

According to this principle, span of control is a span of supervision which depicts the number of
employees that can be handled and controlled effectively by a single manager. According to this
principle, a manager should be able to handle what number of employees under him should be decided.
This decision can be taken by choosing either froma wide or narrow span.

There are two types of span of control:-

a. Wide span of control- It is one in which a manager can supervise and control effectively a large group
of persons at one time. The features of this span are:-

i. Less overhead cost of supervision

ii. Prompt response from the employees

iii. Better communication

iv. Better supervision

v. Better co-ordination

vi. Suitable for repetitive jobs According to this span, one manager can effectively and efficiently handle
a large number of subordinates at one time.
b. Narrow span of control- According to this span, the work and authority is divided amongst many
subordinates and a manager doesn't supervises and control a very big group of people under him. The
manager according to a narrow span supervises a selected number of employees at one time. The
features are:

- i. Work which requires tight control and supervision, for example, handicrafts, ivory work, etc. which
requires craftsmanship, there narrow span is more helpful.

ii. Co-ordination is difficult to be achieved.

iii. Communication gaps can come.

iv. Messages can be distorted.

v. Specialization work can be achieved.

Authority Flows from Top to Bottom

Managing Director

↓ Marketing Manager

↓ Sales/ Media Manager

↓ Salesmen

IV. Classification of Organizations

Organizations are basically clasified on the basis of relationships. There are two types of
organizations formed on the basis of relationships in an organization

1. Formal Organization - This is one which refers to a structure of well defined jobs
each bearing a measure of authority and responsibility.

It is a conscious determination by which people accomplish goals by adhering to the

norms laid down by the structure. This kind of organization is an arbitrary set up in
which each person is responsible for his performance. Formal organization has a
formal set up to achieve pre- determined goals.

The formal structure is described by management through

a. Organization Chart- is a diagram of the organizations official position and formal

lines of authority.

b. Organizational Manual- provides written descriptions of authority relationships,

details the functions of major organizational units, and describes job procedures.

c. Policy Manual- describes personnel activities and company policies

 2. Informal Organization - It refers to a network of personal and social relationships
which spontaneously originates within the formal set up.

Informal organizations develop relationships which are built on likes, dislikes,

feelings and emotions. Therefore, the network of social groups based on friendships
can be called as informal organizations. There is no conscious effort made to have
informal organization. It emerges from the formal organization and it is not based on
any rules and regulations as in case of formal organization.

[Link]